kleef&co on Twitter

Canada’s Parliamentary budget watchdog says it would cost $76 billion per year to fund a nationwide Guaranteed Basic Income (GBI) — which seems a wildly inflated price.

If it Costs $76 Billion, You’re Doing it All Wrong!

(a) For starters, even the Parliamentary Budget Officer (PBO) admits the federal government already spends $33 billion annually to support low-income Canadians — many of whom are senior citizens receiving the Old Age Supplement (OAS) — therefore, what the budget officer really means is the federal government would need an additional $44 billion to fund a universal GBI.

Suddenly, we’re talking $44 billion, not $76 billion

(b) Also, every province in Canada already has monthly social assistance payments to help those adults with no income, or whose Employment Insurance (EI) has run out and who can’t find work, or who live on a monthly disability benefit. There are other situations where people qualify for social assistance but those three groups represent the largest percentage of recipients.

From the federal perspective, a GBI is about the federal government ‘topping-up’ the monthly amount that provincial social assistance and OAS recipients already receive to a reasonable amount that a person could actually live on, sans luxuries.

See? It isn’t about paying the whole shot, it’s about replacing the many overlapping federal and provincial social assistance plans that are available to people trapped in the bottom economic quintile.

Now it’s $15 billion, not $44 billion

(c) Another reason the PBO numbers are so high is that he claims every adult on social assistance needs $17,000+ per year which is still well below the official ‘poverty line’ in most provinces. But it’s just too high. The PBO also says that couples who live together would receive $25,000 per year.

If a person lived in rural Canada he or she could get by on a lower amount than suggested by the PBO, but if they live in Toronto even his higher amounts won’t be enough.

So the question is:

Do we want to pay people living on social assistance a large enough amount that allows them to live in Canada’s most expensive cities?

Or do we want to pay people living on social assistance an amount that allows them to live in the other 99% of Canada’s landmass?

If we use the figure of $1088/month per individual (a number that is widely accepted by anti-poverty groups across North America) instead of the PBO’s inflated number, suddenly our 15 billion dollar problem turns into 2.2 billion dollar problem.

Now it’s $2.2 billion, not $15 billion

But it means that a person couldn’t afford to live in expensive cities like Toronto, Vancouver, or Ottawa as real estate prices there (and therefore, rent prices) are too high.

Q: Is it really that onerous to suggest to people on social assistance that they don’t live in Canada’s most expensive cities?

Q: From their point of view, isn’t it better for them to seek out lower-cost rents in Canada’s small towns and live there?

Q: Why would anyone want to spend almost all of their monthly social assistance payment to rent a room in a house in one of Canada’s largest cities when they could rent an apartment or even a small mobile home in small-town Canada?

As the Canadian government spends a lot of time and money to convince people to move to smaller centres (sometimes paying new Doctors and other professionals a higher rate to relocate to small towns so that residents there can receive medical care on a timely basis) wouldn’t GBI recipients moving to smaller towns and cities lessen the need to pay Doctors and other professionals more than the normal rate to practice in those regions?

Many Doctors would no longer need to be paid extra to base their practice in Canada’s small towns once large numbers of GBI recipients would move to small-town Canada. (Many of whom would be senior citizens who could finally afford to move, it must be said)

Let’s pretend that factor represents a future savings of 200 million/yr — which sounds like a lot but it isn’t — because in addition to the premium that Canada pays new Doctors to practice in marginal areas of the country, the federal government must also fund the monitoring and management of that system. It isn’t run by one person in a telephone booth earning minimum wage.

Also, many Doctors contest their small-town posting decision which must be adjudicated at significant cost to the government.

Now it’s $2 billion, not $2.2 billion

Streamlining the System

We know that duplication of services costs money.

That covers anything that is done twice (2x) but how much money is wasted when there is duplication across ten provinces? (That’s 10x by the way — which is called a ‘decuple’) Because that’s what is happening with social assistance across this country.

Each of the ten provinces of Canada has its own Income Assistance programme and the government of Canada has various Income Assistance programmes for each of the ten provinces and three territories to support those who can’t afford to live on their own.

Also, Canada ‘tops-up’ the monthly income of senior citizens across the country through the OAS to something approaching half of the official poverty line in some cases. (Let’s not forget it was seniors that built this great country, and they deserve better than that)

Centralization can save duplication of services 10x over

Imagine if all social assistance benefits were paid out from one centralized location (say, in Winnipeg) and most of those provincial Income Assistance offices could close down.

Each provincial ‘welfare office’ with 20 to 100 staff, must cost well over a million dollars (the cost of the real estate alone) and must cost over one million dollars per month to staff and maintain — perhaps more. (Some of these offices would remain open because they offer other provincial services besides managing social assistance recipients)

Not only would each province save multi-millions, so would the federal government!

Now we’re saving the provinces money!

And, the federal government could close many offices across the country on account of being centralized and a social assistance ‘supercentre’ could handle every social assistance need across the country — whether it’s topping-up a senior citizen’s monthly income to $1088/month, or ‘topping-up’ a part-time worker’s monthly income to $1088/month, or paying those on social assistance or disability $1088/month — and save money compared to the way it’s presently operated!

Now we’re saving each province multi-millions (the amount of savings depend on the total population of the province) and we’re saving the federal government about $2 billion compared to the way it’s run now.

Now we’re down to $0, not $2 billion

Hey, this is fun! Wanna save some more?

Means Testing

NOTE: The GBI itself is based on having no ‘means test’ so every Canadian adult resident who earns less than $1088/month would automatically be eligible to receive either the full amount (if they’re earning nothing at all) or a ‘top-up’ to $1088/month.

It also means that homeless people could afford to rent a home if they live in small-town Canada. (Read: No more homeless people in Canada)

It means that every person on social assistance can afford to eatproperly if they live in one of Canada’s small towns. (Read: People who use part of their grocery money to pay the rent or keep the heat on during the winter… spend more time in the Hospital)

It means that poverty-stricken people won’t be tempted to commit crimes in order to pay their rent, eat, or to acquire steel-toed work boots for a temporary day labour position, or for bus fare to get to a job interview. (I’ve volunteered at a homeless shelter; I’ve seen it happen)

By simply paying a standardized monthly benefit to Canadian adults who earn less than $1088/month homelessness will cease to be an issue, property crime rates will plummet, hospital visits will decrease, provinces can free themselves of managing social assistance recipients, provincial office buildings can be sold, the federal government can streamline OAS and other federal anti-poverty programmes into one super-efficient monthly payment system — and the feds can cross-verify CRA tax returns with the GBI system to catch cheaters.

Let’s pretend that all of it together could save the federal government 10 billion dollars annually. (It would save more than that)

Now we’re SAVING the federal government 10 billion dollars per year!

On the provincial side, almost every government in Canada could stop running provincial deficits by getting out of the social assistance business, freeing themselves of overlapping social assistance programmes, selling off their Income Assistance office buildings, lower their healthcare spending, and lower their property crimes spending which requires a lot of police investigations, court time, and incarceration for offenders.

Why would every province suddenly show a budget surplus?

No more provincial deficits to worry about — because after offloading their social assistance programmes onto the federal government — Canada’s provinces would save significant sums of money.

Provincial social assistance programmes are paid for by provincial sales tax, provincial income tax, and federal transfer payments — and those tax rates are set by the provincial spending plan for the following twelve months. Therefore, once the federal government absorbs those provincial programmes, provincial taxation rates could remain the same (for a time) and every province would suddenly find themselves in a budget surplus.

After five years elapsed they would probably remove the portion of the provincial taxation that had funded their social assistance programmes, thereby saving provincial income tax payers money at tax time.

Of course, the people who work in Income Assistance offices might be wary of this change but they’re highly trained and valuable people that their respective provincial government could easily put to work on positive programmes like conservation, education, healthcare, etc. instead of having them spend their days trying to prop up financially marginal people 365 days per year.

I’d expect that each provincial government would treat their Income Assistance staff with the respect they deserve and guarantee them a minimum of five more years of employment to each and every Income Assistance employee that was no longer needed at their Income Assistance office due to their social assistance programmes being superceded by the federal GBI.

How to Pay for it Until the $10 Billion Annual Savings Kick-in

During the five year transition period, the federal government would be required to find a revenue stream for a GBI that rolls all provincial and all federal social assistance programmes into one programme that pays $1088 per month. (CPP and EI would remain completely unaffected, obviously)

As stated above, the federal government already pays 100% of the cost of existing federal level social assistance programmes across Canada, so to absorb the provincial systems and afford the slightly more expensive GBI, it would need to add an across-the-board .29% increase to the federal income tax rate and concomitantly lower transfer payments to the provinces.

EITHER WAY, the federal government would save a minimum of $10 billion per year, creating new revenue streams to afford the GBI until those savings kick-in is completely doable, and the feds would never need to run a budget deficit again. And many social problems (like homelessness) would disappear forever.

Disclaimer: I have my own renewable energy website and I contribute renewable energy blog posts to another website — so I’m obviously a proponent of renewable energy.

However, back in the day I was an entrepreneur who learned about dealing with various levels of government, about operating within regulatory frameworks, and needing to budget carefully for future large scale projects.

With the foregoing in mind, I offer the following comment about the Kinder Morgan pipeline project proposal (the TMX expansion) that is planned to run from Edmonton, Alberta through to the Westridge oil refinery (Chevron) in Burnaby, BC:

Unfortunately, there are still places where renewable energy won’t work in a cost-effective manner. Eventually, renewable energy technology will develop and become feasible everywhere on the planet. But we still need oil & gas in the meantime.

The past 5 Canadian Prime Ministers and probably a similar number of British Columbia and Alberta Premiers gave tacit approval to the Kinder Morgan pipeline expansion which led the company to believe the twinning of the pipeline would be approved.

For the federal government or any province to pull the rug out from under a company that has been led along for two decades to believe their project would be approved — and which provides a valuable service for people who drive cars and trucks in British Columbia and Alberta — would be unthinkable and two-faced.

The TMX Expansion should be approved based on those points alone as both Conservative and Liberal federal governments have promised the project would be a ‘Go’ and KM proceeded on that basis.

IMPORTANT TO NOTE IF KINDER MORGAN WAS OPERATING IN A TPP COUNTRY: The various levels of government in Canada could be sued for not following through on their tacit approval in recent years — and Kinder Morgan and possibly Chevron would likely win a court judgement worth billions of dollars which Canadian taxpayers would be forced to pay. Not only that, but a TPP court could still order the pipeline built!

However, there is another option which I will cover below.

About the Westridge Refinery in Burnaby, BC

At present, one tanker per week leaves the Westridge refinery (Chevron) in Burnaby BC, sometimes carrying 50,000 or 100,000 barrels of oil, gasoline, diesel, kerosene, or more exotic hydrocarbons like naptha, xylene, toulolene, and other volatile liquids. But once the 2nd pipeline is built, one tanker per day will leave the Westridge refinery.

All of these are explosive liquids and in an accident where fire occurs could easily destroy (yes, entirely destroy) the 2nd Narrows bridge or the Lions Gate bridge, which is why they run under those bridges at 4:00am to enhance their margin of safety. (Thankfully, there are no terrorists in our region)

FILE PHOTO: Two ships pass under the Lions Gate Bridge that links Vancouver with North Vancouver. Image courtesy of CBC.ca

Proposal to Enhance Shipping Safety in BC by Relocating the Westridge Refinery to Deltaport

I propose relocating the Westridge refinery in Burnaby BC to Deltaport BC, and that the federal government of Canada and the provinces of British Columbia and Alberta offer significant investment, allowing public safety to be dramatically improved.

NOTE 1: I’ve spoken to Ray Lord who is highly respected within the petrochemicals industry and remains the chief spokesman for Chevron’s Westridge refinery and he seemed interested in my idea to move the refinery to Deltaport.

Instead of a 2nd Pipeline – Move the Oil by Rail to Deltaport

It’s magic that Deltaport is the terminus for CN Rail and by using the rail option to move petroleum it means the proposed 2nd pipeline would never be needed.

Public safety would be dramatically improved, Chevron would have two crude oil transportation modes to keep it running, and in the event of a spill it’s well documented that rail spills are orders of magnitude smaller than pipeline spills.

NOTE 2: Pipeline spill incidents average 1.2 million BARRELS of oil, while rail tanker spill incidents average 220,000 US GALLONS. A huge difference!

This option would allow 3 shifts at the relocated refinery instead of 2 as is the case now, and even allow the refinery to continue operations in the event of a failure along the existing pipeline route.

NOTE 3: KM would lose the ability to build the new pipeline but allow it to neatly step out of a public relations nightmare — and it might choose to become an investor in the new Deltaport facility and not lose a cent of profit in the process.

All for less than the cost of a potential legal action brought by Kinder Morgan and possibly Chevron too.

A Fund to Remediate Pipeline Oil Spills

A 6 cents per barrel of oil tax should be applied to all liquids that move through pipelines in Canada which should be held in a trust fund to deal with future pipeline spills. The fund could be invested and the returns would increase the total value of the fund.

NOTE 4: Railways don’t need such a tax as they can’t continue rail operations along that line until the spill is cleaned up, so they’re already highly motivated to clean up rail spills ASAP.

If Canada, British Columbia and Alberta kicked in funding to relocate the refinery:

No longer any need for the TMX Expansion

Thousands of jobs would be created to build the new Deltaport refinery

Public safety would increase by orders of magnitude in British Columbia

Chevron, environmental protesters, and Kinder Morgan would be happier

And all that government investment would eventually be recovered through taxes.

Time

An hour wasted is an hour you never get back. And through no fault of their own, Canada’s premiers are wasting thousands of hours per year.

Canada’s premiers are important people. They hold the keys to multibillion dollar economies within Canada, are privy to some of Canada’s most secret security information, and they need to hopscotch around their region to hold meetings with CEO’s, other levels of government, attend events, sometimes need to get an overview of natural or man-made disasters, and to view proposed mega-projects like hydro-electric dams, major highway systems, pipelines, and railways, all over their particular province.

In the province of Alberta, premier Rachel Notley travels around the province in a convoy of Chevrolet Suburbans worth more than many Albertan homes. With weather-related travel issues, and the time it takes to get by car from the provincial capital of Edmonton to Alberta’s far-flung cities and mega-projects, you can be sure those Suburbans are getting ‘miled-out’ and replaced every 2-3 years.

We all know that much of Alberta’s business is conducted in Calgary and that the provincial capital is 281 kilometres away, in Edmonton.

It takes Rachel Notley and her convoy of Suburbans 3-hours to travel to Calgary (in good weather) sometimes 5-hours (in bad weather) And then there’s the trip home after the meetings, which of course, doubles the travel time. (Alberta premiers typically travel to Calgary about 3 times per week)

But not only that. During the Fort MacMurray fires the highways were closed. The roads were closed a few years ago in regards to the Calgary floods, and it occurs many times during the winter months along the Highway 2 corridor between Edmonton and Calgary that it gets closed due to icy conditions. Sometimes, quite suddenly — like when you’re halfway home from Calgary.

During busy months, half of premier Rachel Notley’s working hours (and whichever cabinet members are travelling with her) might be wasted sitting in the back of an SUV waiting to get to their destination.

It’s a colossal waste of time for every premier in Confederation. Time that could be better spent. Meaning more actual productivity per hour for all of Canada’s premiers. I’m pretty sure that Alberta’s premier spends 900 hours per year being transported by SUV, which is about average for Alberta premiers.

Imagine the wasted time for an Ontario premier — a province with a much higher population than Canada’s four Western provinces combined.

And I’m not ‘fobbed-off’ by claims that the time spent riding around in the back of a Suburban is productive time. If that were true, then why are premiers bothering to personally attend meetings in the first place? If phone calls and emails work so well, why leave the provincial capital? Ever?

“If I had asked people what they wanted, they would’ve said faster horses.” — Henry Ford

A Better and Faster way to Travel

Canadian Army CH-146 Griffon. Photo courtesy of Department of National Defence – Canada.

Canada’s Griffon helicopters, which are underutilized by the Canadian Army are the perfect answer to efficiently move Canada’s premiers around their home provinces, while saving thousands of hours of time and improving the security of premiers and their staff.

It’s a light helicopter that can carry 10 people and their gear, and it can travel long distances (for a helicopter) at 250 kilometres per hour. There isn’t anywhere in Alberta that the Griffon CH-146 couldn’t fly on one tank of fuel.

But with all of that going for it, it’s still a ‘boy among men’ when compared to other military helicopters, which is the only reason why it’s seen limited military use.

Let’s face it, it was built for Army commanders to tour the battlefield in the interests of creating a better battle plan for the following day, and to quickly zip in and out of combat zones with ammo and food for soldiers. A Black Hawk S-70A or Sea Stallion CH-53E battlewagon it’s not.

But for ferrying premiers and other government officials travelling with the premier, it could very easily handle that role. And, as an added bonus for the Army, the Canadian Army crews that fly them would be better able to meet their (required) number of flight hours per month. That’s reason enough right there to detail one of them to each Canadian premier.

Note: Out of the original order of 100 Griffons, the Canadian military has 20 Griffon helicopters that are parked — and not for safety reasons. They just don’t have missions. The helicopters were already paid-for, years ago. They sit unused because they have no missions to fly. And pilot skills deteriorate without a minimum of 30-hours of flight time per month.

Productivity

Would Alberta taxpayers be getting better productivity out of their premier with 2-hours of travel time per day vs. the present 6-10 hours per day, on average? The answer seems blatantly obvious.

In short; Is it better for the premier of Alberta to sit in the back seat of a multi-vehicle motorcade of Suburbans for 900 hours per year, or to fly in helicopters for 300 hours per year? Thereby saving 600 hours per year for more productive use.

When Canada’s premiers are conducting business on behalf of the people where one deal could conceivably cost or save billions of dollars, isn’t it better to have premiers that arrive refreshed and ready to negotiate — rather than arriving frazzled, after a harrowing 5-hour drive on icy roads?

This is one case where the federal government should divert from its typical overly-cautious Canadian tendencies and actually make the arrangements to dramatically increase the productivity of every Canadian premier.

In this day and age, it’s great to ‘work hard’ but it’s more important to ‘work smart’. And working smart means adding 600-hours of productive time to each premier’s schedule annually.

Prime Minister Justin Trudeau, I urge you to direct the Canadian Army to park one Griffon helicopter and crew beside each provincial legislature for the official use of Canada’s premiers (and whichever officials are required to accompany them on provincial business) in the interests of increasing the productivity and personal security of all of Canada’s premiers.

This would be the low-hanging fruit, Mr. Prime Minister, on the path to making Canada all that it can and should be.